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student loan repayment: can it be done?

I tweeted this a.m. that I paid off my student loan yesterday. Since I’ve been making monthly payments on that thing for 10 years, I felt celebratory. But after tweeting, I sort of regretted it. The twitter account, @Debt_Free_2day favorited and retweeted me (presumably because I am an inspiration for having closed out a loan). Confirming this idea, someone else tweeted that my news made them “seriously emotional,” adding #ItCanBeDone. Others congratulated me.

Here’s the thing. I feel happy to have closed out this loan, but no one should be inspired by it–and I’m sorry my tweet misled people. What I didn’t think to say was that my loan was for $6,200. The idea it takes a comfortable middle class person 10 years to pay off a $6,200 loan when others face boulders of debt in the range of $100K, coupled with the fact I could be looking at these same kinds of numbers after my kids go to college (starting next year!), is not inspiring. It is daunting. Horrifying.

How did I get away with just $6,200 in debt anyway?

I started graduate school twenty years ago, in 1994. While that feels like a blink to me, college tuition rates tell a different story: surely only the passing of a century can account for the snowballing 3.7-4.2% average increase we’ve seen in tuition every year since then?

Even in the golden olden days of 1994, we thought higher education was an expensive luxury. I paid for my master’s degree with $5,000 I inherited when my grandmother passed. Neither of my grandparents went to college, and both placed a high value on education. This inheritance was a huge windfall to me, and I felt obligated to spend it wisely. Confident my grandparents would have approved of my choice, I put the money in a separate bank account and drew from it only to pay for school expenses. When I graduated with my master’s degree in 1996, I had exactly $30 left. At the time, I thought, “Wow, I can’t believe it took almost every penny!” Even at the more modest rates of the past, I viewed graduate school as an expensive luxury that I only afforded with this unexpected gift.

Then I wanted to get my Ph.D.

By now it was 1997. Tuition rates were increasing at a rate of 3.7% each year, my doctoral program would be out of state, and my acceptance to the program did not come with funding. My tuition jumped from about $130/credit hour for the master’s, to about $350/credit hour for the Ph.D. (still a pittance by today’s standards, I know). This is when I borrowed the $6,200–to pay for my first year of doctoral work. The year prior, my husband and I had struck a ludicrous deal: I would stay home with the kids we hoped to have if he would support me while I got my Ph.D. (the repercussions of our naiveté in this decision are in part the subject of my memoir). But still, Steve’s support meant I did not have to pay room and board, so my $6K was not the $20K that my friends borrowed.

The next year, I got funding. Honestly, I may have dropped out if I hadn’t. Not just because of the money, but because no funding also meant no teaching. I knew with no teaching I had no chance of getting a job (if only I’d known I had so little chance of getting a job anyway!). Three years of teaching/funding paid my tuition and provided a small stipend that helped Steve and I with our bills. By the time the funding ran out, I was dissertating. Then I only had to pay for 1 credit-hour per semester, an approximate $400 expense that we scraped together twice a year without loans.

And there you have it. With a little luck, I managed only $6,200 in debt for a Ph.D. Meanwhile, my nephew just borrowed $4,200 to pay for one college-level class–his last one. I don’t know how much he owes in total, but I do know it’s the kind of number that sits in your gut like a rock.

In a great irony, I’ve paid off my debt just in time to incur more. My son will follow his cousin to college next year. We have actually managed to save enough money to pay for two years of his schooling (because he is an athlete, we already know he will attend a public school in our state–but don’t even think scholarship). At our current pace of inflation, those final two years will cost about $25K each. How will he (or us? we haven’t crossed that bridge yet) pay off $50K in loans?

And then my daughter will go to college as well. After years of responsible saving, will we still find ourselves at the end of our lives worthy only of debtor’s prison?

The latest financial advice for people like us is that we must not take on our kids’ college debt because we won’t live long enough to pay it off. We must leave it to our kids while we focus our resources on retirement. Either way, our kids inherit the burden: they can pay their own college loans or pay for our nursing home.

In another irony, my son is enrolled in a required high school class called Personal Finance this year. He is learning about checking and savings accounts, debit cards, credit cards and the like. Most importantly, he is learning about the imperatives of avoiding and managing debt. Yet, quite possibly, the first thing he will do after high school graduation is incur a debt so insurmountable it could take his entire adult life to pay it off.

Should I tell him not to worry? After all, it only took me 10 years to meet my miniscule obligation. Of course, times have changed since I went to school. While I couldn’t find a job in my field, my son can count on the benefit of a free internship after graduation to help him dig himself out!

And what of the person who tweeted #ItCanBeDone this morning? Do I write them and tell them it can’t? No. For who am I to say? Besides, I’m holding out the same hope for my kids, and their cousins too.